STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

Chapter 2.4
Equity and the
Prosperity of Cities
The past few decades have witnessed a notable surge in
economic growth, but one which has been accompanied
by an equally daunting degree of inequity under various
forms, with wider income gaps and deepening poverty
in many cities across the world. In the 1970s, widening
income gaps began an unhealthy co-existence with
economic growth, with reduced incomes for households in
the middle and lower classes and steady increases for the
well-off. Economic inequality is seriously detrimental to the
equitable distribution among individuals of opportunities
to pursue a life of their
choosing and be spared
Cities must realize from extreme deprivation
FACT that equity has
in outcomes.
a significant impact on
Equity involves
economic performance, systematic (re)distribution
since the greater the degree
of the economic benefits
of equity, the greater the
of growth or development,
chances of a fuller, more
efficient use of available with legal frameworks
resources, including skills ensuring a ‘level playing
and creative talent. field’ and institutions
protecting the rights
of the poor, minorities
and vulnerable groups.
Promotion of equity
also involves enhancing
socioeconomic equality
and providing for civic
participation by all in the
social, political and cultural
spheres.
1
As understood in
FACT this Report urban
prosperity thrives on equity,
which involves reduction
in barriers on individual/
collective potential,
expansion of opportunities,
and strengthening of
human agency2 and civic
engagement.
68
THE UNEQUAL WEALTH OF CITIES: INCREASED
INCOME DISPARITIES
The 2011 OECD report Divided We Stand stresses that
income gaps between rich and poor are expanding in both
developed and developing countries. In OECD countries,
inequalities are as steep as they have been for over 30
years. The Report shows that, in advanced economies, the
average income of the richest 10 per cent of the population
is about nine times higher than that of the poorest
10 per cent. In Europe’s Nordic countries, the average is a
multiple of six but growing,
compared with multiples
of 10 in Italy, Korea and
the United Kingdom, and
up to 14 in Israel, Turkey
and the United States.
These are overshadowed
by countries such as Chile
and Mexico with multiples
of 27, and in Brazil, despite
recent declines in inequity
(the exception among
the BRICs countries), the
ratio of incomes between
richest and poorest reached
a staggering 50:1. 4 In
the 34 OECD member
countries, Gini coefficients
have risen by 10 per cent
on average between the
1980s and the late 2000s
(from 0.29 to 0.316). 5
In emerging economies
(such as Argentina, Brazil,
China, India, Indonesia,
the Russian Federation
FACT
Cities generate
wealth, but it
is not shared equitably.
Despite considerable
increases in capital and
per capita GDP growth
along with reductions
in extreme poverty,
inequality as a whole is
growing in most parts
of the world – a process
that undermines urban
prosperity.
FACT
In many cities,
the population
and local experts
concur that inequalities
are becoming steeper.
A review of inequality
in cities reveals a
steady increase over
the long term, as well
as in recent decades. 3
Paradoxically, this has
occurred as wealth rose
enormously around the
world.